Title of Presentation - s1.q4cdn.com · • Grow in foodservice, global beverage, and through ... and steadily growing folding carton market, €10B • No. 2 market share position,

©2018 Graphic Packaging International

Investor Presentation May 2018

©2018 Graphic Packaging International 2

Forward Looking Statements

Any statements of the Company’s expectations in these slides constitute "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Such statements, including but not limited to, expected increases in Adjusted EBITDA and cash flow, as well as expected capital spending, pension expense, cash taxes, depreciation and amortization, pension amortization, interest expense, effective tax rate, and net leverage, are based on currently available information and are subject to various risks and uncertainties that could cause actual results to differ materially from the Company's present expectations. These risks and uncertainties include, but are not limited to, inflation of and volatility in raw material and energy costs, cutbacks in consumer spending that reduce demand for the Company’s products, continuing pressure for lower cost products, the Company’s ability to implement its business strategies, including productivity initiatives and cost reduction plans, currency movements and other risks of conducting business internationally, and the impact of regulatory and litigation matters, including the continued availability of the Company’s net operating loss offset to taxable income, and those that impact the Company’s ability to protect and use its intellectual property. Undue reliance should not be placed on such forward-looking statements, as such statements speak only as of the date on which they are made and the Company undertakes no obligation to update such statements except as required by law. Additional information regarding these and other risks is contained in the Company's periodic filings with the SEC.


Food (37% of Revenue)

Beverage (20% of Revenue)

Household, Personal Care, Other (20% of Revenue)

We are a Packaging Company Making Products for the World’s Food, Beverage, Foodservice, and Consumer Products Companies

3

Foodservice (23% of Revenue)


The Graphic Packaging Story

4

Cash Flow

Geographic Profile

• ‘Pure Play’ paper based packaging company deriving nearly 100% of revenue from defensive food, beverage, foodservice, and consumer goods end-markets

• Largest North American folding carton and paper cup manufacturer

• Vertically integrated, low cost supplier

• Leading paperboard producer across the CRB, CUK, and SBS paperboard grades

• ~3.7M tons of paperboard produced annually

• Significant opportunities for growth and productivity gains post combination with SBS mills and foodservice converting assets

• Strategic positions outside the U.S. (Europe, Mexico, Australia\New Zealand) provide further runway for growth

• Strong cash flow generation profile. Balanced and compelling capital allocation track record (capex, M&A, dividends, share repurchases)

(1) The 2017 Cash Flow is before the impact of the $82 million incremental pension contribution

(1)

~


Leading Market Positions in Folding Carton, Paper Cups, and Paperboard Production

Source: PPC, management estimate

5

North America Folding Carton Market - 2017

U.S. Paper Cups Market - 2017

Paperboard Mill Position (000, tons)

#1 N.A. Share

#2 N.A. Share #1 N.A. Share

Source: Management estimate

Source: AF&PA, management estimate


Low Cost Mills

• 4 Virgin Paper Mills located near Southeast low cost wood fiber baskets – Largest producer of CUK in

world at ~1.5M tons – 2nd largest N. America SBS

producer at ~1.2M tons • 4 Recycled Mills located near

largest customers – Largest N. America

producer of CRB at ~1.0M tons

• Recent investments:

– Reduce energy footprint – Reduce chemical usage – Reduce water usage

• Generate ~1-2% growth annually from innovation

• Focused on consumer trends: – Sustainability – Specialty Brands – Convenience – Freshness – Healthier Choices

• Innovation centers world-wide

Innovative Converted Products

Efficient Converting

• 60+ Global Converting Plants

• U.S. National Accounts – Located close to mills to

minimize logistics costs

• U.S. Regional Accounts – Located close to customers

to optimize response time

• Europe – Acquired network of high

quality, low cost assets

Drives Long-Term EBITDA & Cash Flow

A Vertically Integrated Business Model Drives Cash Flow by Selling Folding Cartons and Foodservice Products to Leading CPG Companies

6


Vertically Integrated Business Model Offers Tremendous Operating Leverage

7

Outsource to support additional demand

Grow converting volume

• Europe

• Other International

• North America

• New product development

• Growth in foodservice

• Conversions into CUK

• Targeted share gains

• Acquisitions Fill the mills

• Maintain/grow open market and integrated sales volume

• Optimize the mix

Invest in the mills

• Add incremental capacity (when clearly required)

• Reduce costs

• Expand product offering

Drives EBITDA and Cash Flow


New Product Development (NPD)

Brand Building

8

Summary • NPD adds approximately 100 basis points to revenue per annum • GPK’s core volume has roughly been flat over the last 5-years as NPD growth with new customers and in new

geographies offset end-market trends in packaged food • NPD focus areas – Brand Building, Convenience, Foodservice, Strength – substrate substitution opportunities

• Differentiate product on shelf • Substrate substitution

• Shrink wrap to CUK

Foodservice

• Growing vertical • Well positioned with SBS and CUK paperboard

substrates

Convenience

• Improved convenience features for customers • On the go consumption • Proprietary microwave technology

Strength

• Exposed to the Club Store channel • Substrate substitution

• Corrugated to CUK • Drives savings to CPG • Improved shelf appeal and convenience

features


Key Financial Metrics

Adjusted EBITDA and EBITDA Margins Cash Flow from Operations (CFO), Capex

Dividends and Share Repurchases Net Debt/Adjusted EBITDA

9

10.0%

11.0%

12.0%

13.0%

14.0%

15.0%

16.0%

17.0%

18.0%

19.0%

$400

$450

$500

$550

$600

$650

$700

$750

$800

2012 2013 2014 2015 2016 2017

EB

ITD

A

Ma

rgin

s (%

)

EB

ITD

A

US

$ M

Adjusted EBITDA Adjusted EBITDA Margins

(400)

(200)

0

200

400

600

800

2012 2013 2014 2015 2016 2017

US

$ M

CFO Capex Capex Avg.

4.3

3.5 3.53.3

2.62.4

2.7

3.1

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

2010 2011 2012 2013 2014 2015 2016 2017

Ne

t D

eb

t/E

BIT

DA

Net Debt/Adjusted EBITDA

0

20

40

60

80

100

120

140

160

180

2014 2015 2016 2017

US

$,

M

Dividends Share Repurchases

(1) The 2017 Cash Flow from Operations is before the impact of the $82 million incremental pension contribution


Key Strategic Priorities

Operational Excellence Re-Investment In The Business Capital Allocation

Outperform in tough end-market volume environment • End-markets are stable,

with limited natural growth • Grow in foodservice, global

beverage, and through new product development

Ensure price offsets commodity inflation over reasonable timeframe • For CRB and CUK, roughly,

50% of the contracts that adjust use an index pricing model and 50% are on a cost-model

• For SBS, largely tied to an index pricing model

• Continuing to migrate to cost-models

Drive productivity in excess of labor inflation within baseline capital spend • Baseline capital spend including the SBS

mill and foodservice converting assets combination = $320M

Maintenance = $220M Return focused = $100M

When capital exceeds $320M, clearly outline the project scope and return profile • Size of projects typically in the $15-$40M

range • Target after-tax IRR’s in mid-to-high

teens

Projects in 2016/17 that were above baseline capital spend • Curtain coater installation at Macon in Q3

2016 $30M investment / $10M of

annualized EBITDA • Machine upgrade at W. Monroe in Q1

2017 $40M investment / $12M of

annualized EBITDA

Acquisitions • Purchase assets at post-

synergy multiple well below our current valuation trading multiple

• Continue to increase our integrated (mill to converting) position, to drive cash flow

• Extend run-way for organic capital deployment at compelling IRRs

Dividends • At $0.30/share, dividend/cash

flow ratio is approximately 25%

• Good runway to grow dividend as earnings grow

Share repurchases • Excess cash flow after

acquisitions and dividends back to shareholders via share repurchases, when valuation is compelling

10


Combination with SBS Mill and Foodservice Converting Assets Closed on January 1st, 2018

SBS Mill and Foodservice Converting Assets Overview ~$1.6B Annual Revenue / $210M Adjusted 2017 Estimated EBITDA

Packaging & Foodservice Quick

Service Restaurants

Foodservice Specialty

Coffee

Theater, Convenience Hospitality

Coated Paperboard Mill Foodservice Plant Extrusion Plant Design Center Product Development and Engineering Center

U.S. Foodservice Converting U.S. Coated Paperboard Mills ~1.2M Tons of SBS

• • •

•

• • •

•

• •

•

• •

11

~950K Tons ~250K Tons

3rd Party Converters Internally Converted


Transaction has compelling Business and Financial Rationale

• The SBS mill and foodservice converting assets are scaled and low cost

• Expands leading boxboard (CRB + CUK) mill production footprint to include scaled solid bleached sulfate (SBS) assets

• Significantly expands converting footprint in the growing foodservice market

• Targeting $75 million in synergies by the end of year three

• Creates platform to increase SBS mill to converting integration via core growth and acquisitions

• Structure provides balance sheet strength to build out an integrated SBS platform

• Projected to be accretive to earnings in year one

• Preserves GPK NOL’s

BUSINESS RATIONALE FINANCIAL RATIONALE

12


A Transformative Transaction

Broadens leading North America CRB and CUK

mill footprint to include a scaled SBS footprint

Significantly increases exposure to the growing foodservice market from

10% to 23% of sales

Provides runway to increase SBS

vertical integration rates

Annual Production 2.5M Tons Annual Production 3.7M Tons

Opportunity to drive significant

synergies ~$75M

1

2

3 4

13


The Combination is Aligned with Graphic Packaging’s Long-Standing Operational and Strategic Objectives

• Platform for growth to increase vertical integration of SBS capacity to 80% over time by applying successful CRB/CUK integration strategy

• Growth in faster growing foodservice market

• Continued expansion into European markets

• Strengthen combined new product development capabilities

• Improve mill profitability through continued cost optimization and investment

14


Summary Transaction Structure Overview

• Graphic Packaging will be the sole operator of GPIP. No change to Graphic Packaging’s current Board of Directors or leadership team

• International Paper will have a 2-year lock-up on the monetization of their ownership interest

• International Paper cannot purchase GPK shares for a period of 5 years, subject to limited exceptions

• The combined businesses will operate as Graphic Packaging International, the company’s operating subsidiary

Public Shareholders

Public Shareholders

IP (Publicly-traded)

GPK (Publicly-traded)

Graphic Packaging International

Partners, LLC (GPIP)

Graphic Packaging International, LLC

20.5% 79.5%

Illustrative Transaction Framework

15


Recent North American Acquisitions Provide Profitable Growth Platform in Key Geographies and End Markets

Metro Packaging & Imaging

(Mar ’16) Wayne, NJ

• Combined Expected 2017 Sales ~$560M

• Combined Expected 2017 EBITDA of ~$72M

− Expected annual EBITDA of ~$90-100M in 12 months

• Added 16 folding carton facilities and a CRB mill

− Increased U.S. East Coast presence

− Extended reach in Western U.S., Canada and Mexico

− Integrated additional tons

− Broadened customer base

− Offering new and existing customers a wider range of products

• Gained outstanding leadership and a talented workforce

• Enabled closure of 3 higher cost, legacy facilities (Renton, WA; Piscataway, NJ; Menasha, WI)

RECENT ACQUISITIONS JAN 2015 – DEC 2017

Walter G. Anderson

(Feb ’16)

Hamel, MN

Newton, IA

Tijuana, Mexico

Monterrey, Mexico

G-Box (Jan ’16)

Cascades’ Norampac Mill (Feb ’15)

Cascades’ Norampac (Feb ’15)

Rose City (Jan ’15)

Carded Graphics (Oct ’15)

16

Carton Craft (Jul ’17)

New Albany, IN

Seydaco (Dec ’17)


Current European Manufacturing Footprint

17

European Expansion by Applying our Successful North American Strategy into a Fragmented European Market

Built a scale European business since December 2012:

– $650M Revenue base

• Low double digit EBITDA margins

• 13 plants convert ~300k tons per year

• Strong market positions in Beverage, Food, Convenience

– Significant opportunity to further consolidate market through acquisitions

• Large, stable, and steadily growing folding carton market, €10B

• No. 2 market share position, but less than 10% of the overall market

Folding Cartons Plants


Norgraft Acquisition Consistent with our Strategic Objective to Generate $1 Billion of Folding Carton Converting Revenue in Europe

• Purchase price ~$50M

− Includes new state of the art printing press ~$5M

• LTM Sales of ~$40M

• LTM EBITDA of ~$5.5M

• Run rate EBITDA of ~$7-8M USD in 12-24 months

• Post-synergy, EV/EBITDA multiple is expected to be ~6.0X

• Two converting facilities in Cantabria, Spain

− Acquisition expands our footprint in the stable and modestly growing Southern European food and beverage markets

− Provides runway for further margin improvement

− Increases our mill to converting plant integration into growing markets over time

18

NORGRAFT ACQUISITION

Cantabria, Spain

Norgraft (Oct ‘17)


$1.0B

$0.7B

$0.5B

$0.3B

$0.2B

$0.6B

$0.3B

European Converters

$0.3B

European Folding Carton Market

Food ~€4.1B Beverage ~€0.9B Non-Food (consumables) ~€3.6B Durable/Household ~€1.5B Total Folding Carton ~€10B

Source: Company estimates and ECMA

Large European Folding Carton Market Served by a Broad Range of Converters

19


Colorpak Acquisition Closed in 2016 Expanded Presence in Key Geographies and End Markets

• Enterprise Value of ~A$90M ($68M USD)1

• FY152 Sales of ~A$160M ($122M USD)1

• FY15 EBITDA of ~A$13M ($10M USD)1

− Expected to contribute $5-6M USD of EBITDA in 2016

• Run rate EBITDA of $11-13M USD in 12-24 months

• Three converting facilities

− Grows business in developed food and beverage end use markets

− Allows further expansion of proven integrated supply chain

− Better serves new and existing customers

− Compliments existing Australian Beverage business

20

COLORPAK ACQUISITION

Melbourne, Australia

Sydney, Australia

Auckland, New Zealand

1 Assumes an Exchange Rate of $0.76 USD per $1.00 AUD (Apr ’16 FX rate)

2 FY15 represents the Colorpak fiscal year July ’14 – June ‘15


Appendix

21


Strong Track Record of Capital Allocation and Compelling Valuation Multiple Compared to Packaging Peers

• Mid-to-high teens IRR on organic capital investments that drive spending above the baseline $320M level

• Post-synergy multiple of ~6X on completed acquisitions

• Increased dividend to annualized $0.30/share (2.1% yield); room to grow

• Consistent share repurchase profile

• Since commencing $250M share repurchase on 2/5/2015 have repurchased $291M or 22M shares for ~$13/share, which is equivalent to ~7% of shares outstanding as of 4Q2014

• $210M available under current share repurchase authorization plan

• The share count has declined 22% since year-end 2011

Share Repurchases M&A – Since 2012

1,069

1,309

126

190

0

200

400

600

800

1000

1200

1400

US

$,

M

13

8.5

5.6

0

2

4

6

8

10

12

14

22

250.0

270.0

290.0

310.0

330.0

350.0

370.0

390.0

410.0

(350)

(300)

(250)

(200)

(150)

(100)

(50)

0

2012 2013 2014 2015 2016 2017

Sh

are

s O

/S

US

$ M

Share Repurchase Shares O/S


2018 Guidance

2017 Actual

2018 Guidance

– Cash Flow available for Net Debt Reduction, Dividends & Share Repurchase (before M&A/Capital Markets activity)

$365M ~$475M

– Capital Expenditures $260M $380M

– Cash Pension Contributions $119M $5-$10M

– Pension Expense/(Income) (includes pension amortization) ($6M) $3M

– Cash Taxes $16M $20-$30M

– Depreciation & Amortization (excluding pension amortization)

$314M $430-$450M

– Pension Amortization $7M $6M

– Interest Expense $90M $125-$135M

– Effective Tax Rate (Normalized) 35.8% 24-27%

– Year End Net Leverage Ratio 3.12x 2.5x-3.0x

23

(1) The 2017 Cash Flow is before the impact of the $82 million incremental pension contribution (2) Excludes accelerated depreciation related to the shutdown of the Santa Clara mill

(1)

(2)


Food –~37% of Revenue

Strong competitive position

• High share across core CRB/CUK folding carton food markets

• Strong track record of innovation

• Low cost converting network

• Optimized freight position

Markets are highly stable, but not growing

• Dry foods, cereal, pasta, frozen pizza, frozen foods, microwave

Focus on outperforming tough end-market environment

• Brand building

• Convenience

• Strength – substrate substitution from corrugated to CUK

• Focus on mid-tier customers that are winning in the market place

• GPK’s volume flattish over the last 5-years, despite difficult end-market environment

Grow business through acquisitions

• Closed 7 acquisitions in N.A. over the last 36 months

• Acquisitions enhance end-market (i.e. increased private label) and customer exposure (i.e. increased smaller customers base)

• Acquisitions provide significant runway for cost savings via closure of higher cost assets

24


Beverage –~20% of Revenue


• Leading global market position across all paperboard multipack geographies

• ~80% of Global Beverage business is running on our machines

• ~40% of business is protected by proprietary innovation

Mature markets are stable with pockets of growth

• Beer represents the majority of the portfolio

• Mega beer volume declined modestly in 2017

• Beer is growing globally with paperboard taking share from shrink wrap, reflecting the premiumization trend globally

• Craft beer continues to grow, albeit at a slower rate relative to the previous 5-10 years

• Carbonated soft drink (CSD) volume continues to decline

• The pace moderated slightly in 2016 and 2017

• Growth in other areas helping offset CSD decline

• Sparkling water

• Ready-to-drink teas and energy drinks

• GPK global beverage volume up modestly in 2017

25


Foodservice –~23% of Revenue


• Leading producer of SBS and CUK based foodservice products in North America

• Foodservice produces ~4,000 SKUs of hot and cold cups, lids, sleeves, carriers and food containers


• Low cost converting network

• Optimized freight position

Markets are stable and growing modestly

• Nearly 80% of sales to Quick Serve Restaurants (QSR) channel

• Selling to some of the largest and best known QSR banners

• Fiber-based foodservice products taking share from foam, polystyrene

• Industry organic volume growth of 1%-1.5%

Focus on outperforming market through innovation

• Leading double-wall cup technology

• Strong know how in cup forming and cup lids

• Leading intellectual property on sustainable barrier coatings for cups and containers

Path forward

• Focused on growing business organically and through acquisitions

26


Non-Food Consumer Products and Other –~20% of Revenue

Market exposure for non-food Consumer Products – ~7% of revenue

• Selling into highly stable non-food consumer product end-markets

• Household products

• Pet care

• Laundry

• Personal care

• Non-food cartons highly complimentary to food cartons


• Convenience features

• Substrate substitution

Market exposure for Other - ~13% of revenue

• Exposure to the pharmaceutical, personal care, tobacco, and general consumer end-markets via sales of open market SBS paperboard

27


Americas – Food, Beverage, Foodservice, Consumer Products ~85% of Revenue

Current profile

• N.A (US + Canada), Mexico, Brazil represents about $5.0B in revenue

• N.A. is ~$5.0-5.05B

• Mexico and Brazil are ~$100-150M

• N.A.

• Leading market positions across the food, beverage, foodservice, and household products verticals

• Leader in innovation

• Low cost mill and converting network

• Optimized freight position for food in the US Midwest

• Dedicated plants for beverage

• Mexico

• Recent G-Box acquisition expands footprint in Mexico beyond beverage and provides platform for further acquisitions

End-market exposure

• Food ~37%

• Beverage ~20%

• Foodservice ~23%

• Household and Consumer Products & Other ~20%

28


Europe – Food, Beverage, Consumer Products ~12% of Revenue

Current profile

• Europe represents about $650M in revenue

• UK is about 50% and rest of Europe (primarily W. Europe) is 50%

• Achieved material margin improvement as Europe acquisitions Contego, A&R Carton, and Benson have been integrated – low double digits EBITDA margin vs. 4% in 2012

• On track to ship 150k+ tons of CUK to Europe in 2016, up from 90k into 2014

• No. 2 market share position in a fragmented market

• Significant opportunity to grow via M&A

Balanced end-market exposure

• Beverage

• 50%

• Food

• 20%

• Consumer Products

• 10%

• Convenience

• 10%

• Food Service

• 10%

29


Rest of the World – Australia/Japan/China ~3% of Revenue

Current profile

• Established positions in growing markets around the world

• Australia/New Zealand

• China

• Japan

• Majority of business is beverage, with strong market share positions

• Recent Colorpak acquisition expands footprint in Australia/New Zealand beyond beverage and provides platform for further acquisitions

• Potential for continued growth via bolt-on acquisitions

30


Recession Resistant Model

Nearly 100% of revenue from defensive end-markets

• Food – 37%

• Beverage – 20%

• Foodservice – 23%

• Non-food consumer staples folding cartons and Other – 20%

• North America – 85% of revenues

• Integrated mill to converting network

What happened in 2009?

• Core paper folding carton volume was down 3.6% in 2009

• GPK’s Adjusted EBITDA was up $81 million yoy in 2009 to $556 million or 14%

— Altivity acquisition closed in March 2008 and added $26 million to EBITDA

— Excluding Altivity, EBITDA increased by $54 million yoy driven by positive price/cost spread, productivity, synergies realization

Adjusted EBITDA and Converting Volume

31

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

900.0

Yo

Y %

Ch

an

ge

US

$,

M

Adjusted EBITDA Net Tons Sold Y/Y % Chg.

Beverage,

20%

Food, 37%

Foodservice,

23%

Non-food,

20%

End-Market Exposure

©2018 Graphic Packaging International 32

Reconciliation of Non-GAAP Financial Measures: Adjusted EBITDA

Reconciliation of Non-GAAP Financial Measures

In millions 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008

Consolidated Net Sales 4,403.7$ 4,298.1$ 4,160.2$ 4,240.5$ 4,478.1$ 4,337.1$ 4,206.3$ 4,095.0$ 4,095.8$ 4,079.4$

Net Income Attributable to Graphic Packaging Holding Company 300.2$ 228.0$ 230.1$ 89.7$ 146.6$ 122.6$ 276.9$ 10.7$ 56.4$ (99.7)$

Add (Subtract):

Net (Loss) Income Attributable to Noncontrolling Interests - - - (0.7) 0.1 (2.5) (1.7) - - -

Income Tax Expense (Benefit) (45.5) 93.2 130.4 45.4 67.4 82.5 (229.8) 27.5 24.1 34.4

Equity Income of Unconsolidated Entities (1.7) (1.8) (1.2) (1.7) (1.5) (2.3) (2.1) (1.6) (1.3) (1.1)

Interest Expense, Net 89.7 76.6 67.8 80.7 101.9 111.1 144.9 174.5 196.4 215.4

Depreciation and Amortization 337.3 327.4 300.9 283.9 314.2 297.6 292.3 299.3 326.8 269.2

EBITDA 680.0 723.4 728.0 497.3 628.7 609.0 480.5 510.4 602.4 418.2

Loss (Gain) on Sale, Shutdown, or Impairment of Assets (3.7) - 1.9 180.1 (17.9) 3.0 5.3 - 15.1 15.5

Business Combinations and Other Special Charges 35.9 40.4 21.3 19.0 32.3 24.4 7.1 55.1 69.6 42.1

Goodwill Impairment Charge - - - - - - 96.3 - - -

Alternative Fuel Tax Credits Net of Expenses - - - - - - - - (137.8) -

Loss on Modification or Extinguishment of Debt - - - 14.4 27.1 11.0 2.1 8.4 7.1 -

Adjusted EBITDA 712.2$ 763.8$ 751.2$ 710.8$ 670.2$ 647.4$ 591.3$ 573.9$ 556.4$ 475.8$

Adjusted EBITDA Margin % 16.2% 17.8% 18.1% 16.8% 15.0% 14.9% 14.1% 14.0% 13.6% 11.7%

Net Income Attributable to Graphic Packaging Holding Company 300.2$ 228.0$ 230.1$ 89.7$ 146.6$ 122.6$ 276.9$ 10.7$ 56.4$ (99.7)$

Loss (Gain) on Sale, Shutdown, or Impairment of Assets (3.7) - 1.9 180.1 (17.9) 3.0 5.3 11.7 15.1 15.5

Business Combinations and Other Special Charges 35.9 40.4 21.3 19.0 32.3 24.4 7.1 43.4 69.6 42.1

Accelerated Depreciation Related to Shutdown 16.3 - - - 3.5 - - - - -

Loss on Modification or Extinguishment of Debt - - - 14.4 27.1 11.0 2.1 8.4 7.1 -

Tax Impact on Non-recurring Items (16.0) (12.6) (6.3) (65.1) (10.2) (14.7) (21.8) - - -

Alternative Fuel Tax Credits Net of Expenses - - - - - - - - (137.8) -

Goodwill Impairment Charge - - - - - - 96.3 - - -

Tax Benefit Associated with Release of Tax Valuation Allowance - - - - - - (265.2) - - -

Impact of U.S. Tax Reform (136.0) - - - - - - - - -

One-time Discrete Tax Item - (22.4) - - - - - - - -

Adjusted Net Income 196.7$ 233.4$ 247.0$ 238.1$ 181.4$ 146.3$ 100.7$ 74.2$ 10.4$ (42.1)$

Adjusted Earnings Per Share - Basic 0.63$ 0.73$ 0.75$ 0.72$ 0.52$ 0.37$ 0.27$ 0.22$ 0.03$ (0.13)$

Adjusted Earnings Per Share - Diluted 0.63$ 0.73$ 0.75$ 0.72$ 0.52$ 0.37$ 0.26$ 0.22$ 0.03$ (0.13)$

Weighted Average Number of shares Outstanding - Basic 311.1 320.9 329.5 328.6 347.3 393.4 376.3 343.8 343.1 315.8

Weighted Average Number of shares Outstanding - Diluted 311.9 321.5 330.7 330.5 349.7 396.2 381.7 347.4 344.6 315.8

Calculation of Net Debt:

Short Term Debt and Current Portion of Long-Term Debt 61.3$ 63.4$ 36.6$ 32.2$ 77.4$ 79.8$ 30.1$ 26.0$ 17.6$ 18.6$

Long-Term Debt(a) 2,225.7 2,104.4 1,852.6 1,942.1 2,176.2 2,253.5 2,335.7 2,553.1 2,782.6 3,165.2

Less:

Cash and Cash Equivalents (67.4) (59.1) (54.9) (81.6) (52.2) (51.5) (271.8) (138.7) (149.8) (170.1)

Total Net Debt 2,219.6$ 2,108.7$ 1,834.3$ 1,892.7$ 2,201.4$ 2,281.8$ 2,094.0$ 2,440.4$ 2,650.4$ 3,013.7$

Net Leverage Ratio (Net Debt/Adjusted EBITDA) 3.12$ 2.76$ 2.44$ 2.66$ 3.28$ 3.52$ 3.54$ 4.25$ 4.76$ 6.33$

(a) Excludes unamortized deferred debt issuance costs.

For the year ended December 31,

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